LRT financing on the table

Cambridge Times

Critics who say taxpayers will be paying for light rail transit for decades have been proven right – just not in the way they meant it.

Whichever company is awarded the contract to design, build, finance, operate and maintain the LRT line will have to finance some of the work themselves, as regional councillors recently voted to hold back 25 per cent of the project’s capital costs, to be paid out over the first 30 years of LRT operation.

“The successful bidder needs to put their own financing in place,” said regional chief financial officer Craig Dyer. “We’ll pay off that piece over the 30-year term.”

By holding back some of the capital costs, the region believes the company handling the project would have extra incentive to make the LRT system work well over a long period of time.

The exact amount being withheld won’t be known until the winning bidder is selected in 2014, but Dyer estimated that capital costs would come to about $600 million.

The decision was passed by councillors in a 7-2 vote. Several councillors were absent or in declared conflicts of interest, while Cambridge Coun. Jane Brewer and Kitchener Coun. Jean Haalboom voted against.

Haalboom said she is concerned about the risks of having one company handle all aspects of the project.